This is an area where you just can't be wrong. There are several government bodies that monitor the correctness of payroll processing both federal and state. Payroll processing must contain accurate payroll runs for each pay period. In those payroll runs there might be garnishments, back child support, over- and triple-time, vacation pay, holiday pay, certified payroll runs required by unions, new employee notifications, collection of required reports that your employees must complete. You need to get a state employment Identification Number, and don't forget the Federal Identification Number, then there is all the quarterly and year-end payroll tax returns that must be filed, 941, 944, 940, W3, W2 and any state forms.